Market Roundup 7 December 2022


1) Thai stock market overview

Thailand’s SET Index closed at 1,622.28 points, decreased 10.69 points or 0.65% with a trading value of 55 billion baht. The analyst stated that the Thai stock market moved in a sideways-down trend in response to a selloff in energy and electronics stocks, pressured by negative sentiment amid global recession fears. Meanwhile, investors were monitoring the upcoming Fed’s meeting and political campaign in Thailand. The analyst expected the Thai stock market to move within the range, giving a support level at 1,616-1,611 points and a resistance level at 1,640-1,648 points.


2) Thailand inflation rises 5.55% in November, slowing down for third-consecutive month

Headline inflation in Thailand decreased for a third consecutive month, reaching 5.55% in November 2022 from 5.98% in the previous month and compared with market forecasts of 5.8-5.9%. This was the lowest monthly reading since April.

Core consumer prices went up 3.22% year on year in November, the most since July 2008, following a 3.17% increase in October and falling short of the 3.2% consensus.

The annual inflation rate for the first eleven months of 2022 (January to November) increased marginally to 6.10%.

Thailand’s headline CPI is expected to expand between 5.5% and 6.5% in 2022, up from 1.23% in 2021.


3) Thai baht to continue strengthening against dollar in 2023 as US faces recession

According to KGI Securities, the Thai baht would continue to strengthen against the US dollar in 2023. Foreign market factors and positive baht fundamental conditions may drive the strengthening: 1) the dollar will likely weaken against several currencies, 2) long-dated UST yields will likely decline in 1Q23 and short-dated UST yields will likely decline in 4Q23, 3) Thailand’s central bank will probably increase policy rates by 0.50%, resulting in more NRs cash inflows in 1Q23, and 4) trade and services balances is expected to register surplus.

Thai baht is forecast to drop in the range of 32.00-35.30 against the greenback, averaging 33.80, strengthening from an average of 35.02, and ending in 2022 at 34.30.


4) China eases Covid restrictions on domestic travel and production plants

The Chinese government announced on Wednesday that people will no longer be required to present negative Covid tests or health codes in order to travel across the country while giving a nod to boost its manufacturing as work and local production will not be stopped unless an area is designated as high risk.

The authorities said that it would allow Covid patients with mild symptoms to have home isolation. Meanwhile, other than facilities such as retirement homes, elementary and middle schools and health clinics, venues should not require Covid tests to enter.


5) China’s exports fall further in November amid disruption from Covid outbreak

China’s exports continued to fall in November amid disruption in production lines and operations due to the new wave of Covid-19 outbreak in major cities across the country.

China’s dollar-denominated exports fell 8.7% in November on an annualized basis, much higher than a 3.5% drop forecast by Reuters Poll and a sharp fall from a 0.3% drop in October. The decline in November marked the worst performance of Chinese exports data since February 2020.

Meanwhile, imports fell 10.6% in November compared to a year ago and also fell further than a 6% drop forecast by Reuters Poll.

China reported a trade surplus at $69.84 billion, lower than the forecast for $78.1 billion.